By Eduardo Crespo (*)
specialist at the Federal University of Rio de Janeiro Eduardo Crespo repasa las principales tendencias de la economía mundial. Considera que en Europa lo peor de la crisis todavía no llegó y que en Estados Unidos es difícil saber si quedó atrás. Para el resto del mundo, en particular para América Latina, pronostica la continuidad del crecimiento.
Asia, América Latina y África seguirán creciendo en 2011. Los precios internacionales de las materias primas se recuperan y la demanda asiática crece a niveles precrisis. Las principales economías de estas regiones redujeron sabiamente sus niveles de endeudamiento en monedas extranjeras y acumularon cuantiosas reservas en dólares. En la mayoría de los casos, aplican políticas económicas expansivas. The demand for food and raw materials from China and Asia in general will continue growing for several years, at least until the urbanization and industrialization over a certain critical threshold. In the case of Latin America, these trends reinforce because they tend to improve terms of trade. Prices of imported industrial products tend to be defined increasingly by Asians costs, while prices of raw materials are also driven up by demand from Asia. In the short term, the biggest problem, certainly not least, is that this process generates a floor high enough inflation throughout the region.
U.S.: no reforms of the regime that caused the crisis
The situation in the U.S. and Europe is quite different. In the U.S., the intervention of the Fed (Federal Reserve Bank-) managed to avoid a complete collapse of the banking and financial system. On this basis there was an incipient recovery. However, Americans remain highly indebted households, especially those composed of workers. And the debt coincided with a structural stagnation of wages. In this context, it is foreseeable that the United States regain high growth rates until the private debt is not reduced to more manageable levels, which probably will not happen in a short time. Today, unemployment in the United States about 10% and you can hear many voices calling for the government to reduce the fiscal deficit, as much delay recovery. On the other hand, Obama did not lead to any substantial reform of the institutional arrangements that generated this crisis. The financial market remains as unregulated as before. He was rescued from bankruptcy and paid nothing for the damage caused. And if this is added a context of low interest rates, it is unlikely to return to financial bubbles generated (such as commodities) to revive the economy temporarily, but once completed the system re-immersed in a crisis. Therefore, the United States in the next times will continue to receive reports found, some that aim to recover and others will announce further declines in activity levels.
Europe: a country's monetary provinces nonexistent
In Europe the picture is much bleaker. Now faces the dilemma of widespread default and an output of the euro by several countries, especially PIIGS (Portugal, Ireland, Italy, Greece and Spain) or a long deflation that could still end up in default and the breakdown of euro . Within the existing asymmetries Union tended to worsen in recent years. In all PIIGS private sector borrowed without interruption (in Greece also had this happen with the public sector) and their economies remain a chronic trade deficit with Germany. And it is precisely those economies that grew and increased their productivity. However, lost competitiveness with Germany, because in this country contractionary policies of wage restraint and wage improvements allowed to go behind productivity. Before the euro, these asymmetries were corrected with devaluations. This is the case of Italy during the postwar miracle. But now, with a common currency, this solution does not exist. Each country became a province of a country's monetary nonexistent. Fiscal policies, industrial wages are administered separately by each country. The European Central Bank has no debt for the entire block and is committed to the performance of countries in financial distress. Thus, when the crisis came to Europe, each country had to bail out its financial system without monetary autonomy. It was in this context that fiscal deficits appeared in most of these economies, while also began to fear for non-payment of public debts. This is one of the major differences in Europe in relation to the U.S..
devaluation and neo-protectionism Wars
Today there is a trend appreciation of the currencies of emerging markets, not the devaluation. Moreover, the crisis countries are pushing for this to happen. Now, we might ask: Is it likely a significant devaluation of the dollar or the euro against the currencies of emerging economies? In the case of the dollar, I understand that if this occurs will be more the result of a decision (or pressure) policy that the result of a market mechanism. And the reason is simple: the countries that count most in this story, especially China, fixing the price of their currencies against the dollar by accumulating reservations. Thus, only strong American pressure could promote a devaluation of the dollar against the yuan. As the euro is not expected a sharp devaluation at the moment. Especially considering the horror that the Germans have for inflation. Protectionism always
strengthens in times of crisis. And for this to occur is not necessary to intensify tariff protection or competitive devaluations. There are many other forms of protection, sometimes subtle, which is already being implemented in most places, such as para-tariff measures and disguised forms of protection such as environmental restrictions, health, etc. In fact, many European authors, as Sergio Cesaratto, say German protectionism, predominantly before and after the crisis, as one of the main causes of the crisis in the euro. In other words, the policy of keeping a lid on wages relative to productivity and to promote a kind of suppressed growth in domestic demand and exports can only be interpreted as promoting a form of protectionism.
China: "guilty of all"
Many analysts pointed to China as the main cause of the crisis. Undoubtedly, the expansion of production in China in the world market and the relocation of companies from the U.S. and Europe to China may have negative consequences on employment and wages Americans and Europeans. Now, China is not responsible for the stagnation of wages in the United States or by the reckless financial deregulation. These are trends that had been imposed well before China began to gravitate in the world market. Except now it is found that Reagan and Thatcher were disguised as Anglo Chinese, I think the explanation must be sought elsewhere. Nor can we blame China for European contractionary policies and institutions for the horrors that accompanied the birth of the euro. Moreover, the entry of cheap products from China to the United States helped to maintain low levels inflation, even in periods of high growth as the second half of '90. Moreover, and this is the most important, the crisis has no direct relationship with the U.S. trade deficit. In contrast, at the height of the crisis increased the demand for dollars and many currencies depreciated against the dollar. And the reason is simple: the crisis originated in the inability of millions of American debtors to paying their debts in dollars. If it were a balance of payments crisis that weakens the dollar, is not understood why the U.S. is pressuring China and almost all emerging to stop buying dollars. And in Europe it is exactly same. The debts are denominated in euros and some of their economies, like Germany, are among the most competitive in the world. Others found more ingenious explanations when the Chinese hold. Even said that the purchase of dollars by China generated the low interest rates that drove the financial bubbles. It's amazing as far as the ideology. Low interest rates in America were a result of deliberate policy by the Fed since the 90s. In times of Clinton triggered a sharp reduction in public spending. In this context, what explains the strong growth experienced in the U.S. economy in a period of fiscal contraction? For a Keynesian this could be a paradox. Economic orthodoxy, now absurdly accused the Chinese by low interest rates, then celebrated the "expansionary fiscal contraction." But what was the real cause of the expansion? I understand that the answer is simple: low interest rates fueled by the Fed encouraged a boom in private debt more than offset the fiscal contraction 2
Morning Neuquen, 17/01/2011
(*) Political scientist, economist and professor at the Federal University of Rio de Janeiro.
